Four companies are targeting $247 million in the last active week of the 2017 IPO market. LexinFintech, a Chinese online microloan company, leads the pack with the largest deal of the week. Other IPOs include a life insurer and two small health care deals. While it is unusual to see so many IPOs this close to the holidays, we note that LexinFintech is likely pre-sold in China, and the others are relatively small deals.
| US IPO Calendar | ||||
| Issuer Business |
Symbol Exchange |
Deal Size($m) Market Cap($m) |
Price Range Shares Filed |
Bookrunners |
| Hancock Jaffe Laboratories Irvine, CA |
HJLI Nasdaq |
$13 $76 |
$6.00 - 8.00 1,875,000 |
WallachBeth Capital, WestPark Capital, Network 1 Financial |
| Developing bioprosthetic devices for cardiovascular surgeries. | ||||
| Adial Pharmaceuticals Charlottesville, VA |
ADIL Nasdaq |
$14 $57 |
$9.00 - 11.00 1,400,000 |
Joseph Gunnar |
| Developing a targeted therapy for alcohol use disorder based on an approved drug. | ||||
| Advantage Insurance Puerto Rico |
AVI NYSE |
$100 $208 |
$9.00 - 11.00 10,000,000 |
Raymond James, JMP Securities, B. Riley |
| Provides life insurance to high-net-worth clients and P&C insurance to SMBs. | ||||
| LexinFintech Holdings China |
LX Nasdaq |
$120 $1,815 |
$9.00 - 11.00 12,000,000 |
Goldman Sachs, BofA Merrill, Deutsche Bank, 1 more... |
| Online provider of installment-based loans to young Chinese consumers. | ||||
LexinFintech (LX) aims to raise $120 million at a $1.8 billion market value. The online microloan company originally filed to raise $500 million, but delayed and downsized its IPO following tightening regulation in China’s microloan industry; after $28 million of insider buying (23%), the new deal size represents just 5.6% of the basic market cap. Chinese microloan companies have struggled recently amid regulatory crackdowns and increasing regulatory uncertainty: close peers and recent US IPOs Qudian (QD) and PPDAI Group (PPDF) trade -46% and -42% below their respective IPO prices.
Advantage Insurance (AVI) is targeting $100 million at a $208 million market value. The company, which provides specialty underwriting of private placement life insurance and property and casualty risks, benefits from a management team made up of experienced CLO investors. However, its earnings depend on a high-risk investment portfolio, and the company has experienced slow organic growth.
Adial Pharmaceuticals (ADIL) aims to raise $14 million at a $57 million market value. This clinical stage biopharma is developing treatments for alcohol use disorder (AUD). Adial's lead candidate uses the same active ingredient as Zofran, an approved treatment for nausea and emesis. The company is expected to initiate Phase 3 trials in 2018.
Hancock Jaffe Laboratories (HJLI) plans to raise $13 million at a $76 million valuation. The company is developing bioprosthetic implants to treat cardiovascular disease and currently has three candidates in its pipeline.
Two additional deals could price in the week ahead. Cue Biopharma (CUE), a preclinical immuno-oncology biotech, is targeting $38 million on a min-max, best-efforts basis; underwriter MDB Capital has been the lead on three IPOs since 2014, with each popping 4% to 122% on the first day of trading. Chinese marketing platform iClick Entertainment (ICLK) could also raise $50 million at a $474 million market cap. While iClick is one of the larger independent players, the space is largely dominated by internet giants Tencent and Baidu, and total billings fell in the 9mo17.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 34.4% year-to-date, ahead of the S&P 500, which is up 19.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Square (SQ) and Ferrari (RACE). The Renaissance International IPO Index is up 29.3% year-to-date, while the ACWX is up 22.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Covestro and ABN Amro.
